NPR had some interesting commentary this afternoon. The explanation was that with interest rates rising people will find other investments more attractive than stocks. The big jolt to capitalists was an unexpectedly large increase in average pay, which points toward inflation and rising rates. Hourly wages are on an upward trend too, with some companies paying the high California minimum wage nationwide. Will the cuts to corporate taxes offset these trends? Who knows, but the rising minimum wage is the only hope of resurrecting a middle class- the true measure of a healthy democracy.
But the biggest deal is the end of cheap money. Take that out of the bottom and the whole thing wobbles.
Remember the line from It’s A Wonderful Life: “We’re panicking and Potter is buying.” [or something like that]
@doschicos Got it now.
We’ve been in a bull market for roughly nine years, driven by the government’s fiscal stimulus in response to the Great Recession. The stimulus saved the economy from depression and resulted in a prolonged run up in asset values. The markets are now reacting to market participants recognizing that the stimulus may be ending soon.
I wouldn’t be surprised by a further correction nor would I be surprised by a quick recovery to last month’s valuations. But I think it’s very unlikely that the stock market returns any time soon to the double digit annual appreciation we’ve recently seen.
A diversified portfolio should include international stocks, which would provide some insulation against vagarities specific to the US (although the US markets can certainly affect international markets). I’ve been investing pretty heavily in China-region funds as I believe current US policy is leaving the field clear for the Chinese in terms of international trade, treaties, influence, etc. That should bode well for Chinese markets over the next few years (and decades, even) barring a sudden about-face in US foreign policy.
I agree that once you have accumulated a certain amount of investments, some international exposure is good. However, a lot of the major market movement days, due to interconnectivity in our global environment, have affected world markets across the board. Asian markets are getting hammered as well right now.
@rebeccar In addition to @Sybylla 's great advice (maxing retirement contributions, emergency funds in CD ladder, low fixed-rate mortgage), I would also suggest maxing your HSA (tax-advantaged health savings account) contributions and paying down your mortgage faster with extra payments to principle. This assumes that you intend to stay in your house for the duration; if you see yourself possibly moving in a year or three, renting might be a better option than taking on home-ownership.
Post #45, Interesting. Nikkei is down 7% this morning. Some claim emerging market fall preceded the current selloff. Even with the new tariff imposed, the US market is more wide open than Chinese market with their petty regulations and what nots. I very much doubt Chinese are well positioned in terms of international trade.
By capitalizing on the US abandonment of TTP, China is in a pretty good position, trade wise.
I beg to differ. I doubt there’s much trust between Chinese and the rest in the region. Remember the artificial island the Chinese were building? I don’t think anyone in the region forgot that. That’s just one example.
Like @rebeccar I’m also using the Robinhood app. I’m going to play around a bit with penny stocks- just to see what happens.
Romani, I hope that is just paper exercise. I would not touch penny stocks unless I am very familiar with the company.
In your 401(k), I highly recommend investing in a target fund if you don’t want to actively rebalance your portfolio. Like Fidelity (something) 2060 fund (the number is your retirement year).
romani, regarding Fidelity, who holds my 401K as well. Their folks are paid by the hour, not commission according to the rep I saw just last week.
BB, it’s just a game right now with a very, VERY small amount of money. I just paid off something last night so I have a little extra money this month. I’m still putting my normal amount of money in my 401k etc etc. No worries 
GLM, thank you! That’s really good to know.
Whenever I think of penny stocks, I think of the movie “The Wolf of Wall Street”.
Whethet one’s base salary is hourly is only part of it. It’s more complex, for anyone not just bulk front end. Any my Fidelity rep was more interested in getting me to invest more, than customize how that 401k is currently set up. (She touted the same percentages you can find in any industry advice, wanted to move from highly speculative to low production “safe.”)
My family never made money on penny stocks. My gm was into speculating in them with a spare few hundred dollars and the result was a stack of certificates worth zip. As with any use of your money, it takes savvy to identify what might be a big winner, some knowledge of what makes a small venture stable and what happens as they go through tough periods, whether they make it through the long term maze. You need to be, imo, the sort willing to watch them, trade at s slight upturn, and move on.
A nice mutual fund is better, imo.
I will be unexpectedly inheriting a small amount of money (5-10k depend on how everything shakes out) in the next few months. I honestly have no clue what to do with it. Use it to pay off some student loans/mortgage? Put more in retirement accounts? Invest it?
I’ve never had money before so I feel lost. That’s the other reason I want to go talk to a financial advisor of some sort.
@romanigypsyeyes - it’s not the most lucrative investment but my kids came into a gift from a relative and they bought a CD from Ally bank. The rate was 2% for 12 months. I think it’s slightly less now but a safe place for your money.
Though my S also has a lot of money invested in crypto currencies which I’m not happy about.
“Penny stocks” and “investment” shouldn’t be used in the same sentence. Sub in “gambling”.